by Tanta on 9/17/2007 10:11:00 AM

Today we reflect on the age-old question: if a business reporter is not contributing to the success of the tribe, can we put it on an ice floe and let it float out to sea?

IF you’re considering wading into the housing market as a buyer, seller or borrower, be prepared for choppy water and even an occasional rogue wave. Summer may be just about over, but hurricane season, at least in housing, continues.

Don't worry, this article has some good solid consumer advice for you waders:

What are your options if you’re worried about rising rates?

Risk-tolerant home buyers still might consider an ARM. The initial rates on these loans are often, but not always, lower than those for fixed-rate ones. On Friday the national average rate on a one-year ARM was 6.35 percent, according to HSH Associates, about the same as the rate for a 30-year conforming mortgage. Lenders also offer ARM’s with initial fixed-rate periods of one, five, seven and even 10 years.

Be aware that borrowing via an ARM means, in essence, betting either that interest rates will be steady or fall once your loan begins to adjust, or that you’ll be able to refinance.

That risk makes sense for people who are sure they will move before the adjustments begin. “If you don’t need that 30-year protection, there’s no point in paying for it,” said David C. Schneider, president of the home loans group at Washington Mutual in Seattle. “And you need to understand that you do pay for it.” Over the life of a loan, a higher interest rate can translate into tens of thousands of dollars in additional payments.

As is typically the case in financial matters, it pays to shop around when seeking a mortgage. At the moment, 30-year fixed-rate loans are a better deal than many shorter-term ARM’s, Mr. Gumbinger said.

“If you don’t need that 30-year protection, there’s no point in paying for it." This quote appears in the same article that notes that, given the lack of ARM discounting at the moment, you actually get that 30-year protection for free, whether you "need" it or not, by taking the fixed rate. Plus, we've seen a few glitches lately with that business of being "sure" you will move before the reset fun starts. I notice we never addressed the question of why you would pay transaction costs and take god-awful price risk to buy a house you are "sure" you will only be in for a few years.

Dudes, it's time to update the quote-bots. The old ARM quotes are inoperative. New ARM quotes have been issued. Clear your cache. Thank you for your cooperation.